Mr HAROLD HOLT
- The constitutional position is that the local government bodies function inside the States in which they are situated and the State Governments themselves guard quite jealously their constitutional duties and rights in these matters. Each year at the meeting of the Australian Loan Council, there is a discussion between representatives of the States and the Commonwealth Government at which we seek to reach what is known as the gentlemen's agreement on the level of lo:al government borrowings approved for that particular year. The Commonwealth Government - as I think it will be found on recent experience - has been willing to agree to a figure sometimes in excess of that which the States have felt able to agree to, but agreement is rested there.

The local government bodies have certain taxing rights of their own in respect of the imposition of rates and charges for services, and in that way, together with the loan raisings, and perhaps in other ways to which I have not referred, they are able to sustain a level of activity which, again, raises the perennial problem of whether the ratepayer or the taxpayer, to put it in terms we can understand more clearly, is willing to pay more for rather better services than are currently enjoyed.